Play Updates, Thursday, 09/25/2008

In Play Updates and Reviews

by James Brown

Call Updates

Allergan - AGN - close: 57.38 change: +1.41 stop: 55.29 *new*

Thursday's market bounce gave AGN a nice 2.5% rebound but the rally stalled
under $58.00 and its 200-dma. The current drama over the bail-out plan for Wall
Street is going to move the market. Unfortunately, we can't say for sure what
direction that move will be. More conservative traders will want to consider an
early exit in AGN right here to cut your losses. We're raising the stop loss
toward yesterday's low and we're not suggesting new positions at this time. Our
target is the $64.00-65.00
range. The Point & Figure chart is bullish with a $75
target.

It would appear that investors are running for their lives AWAY from WM. The
stock bounced this morning with a 12% gain but that quickly vanished and shares
ended the session down another 25% and on huge volume. There was some chatter
this morning that WM was talking to a couple of private equity firms but nothing
appears to be in the works. Meanwhile of the six large banks looking at WM as a
potential acquisition it now sounds like two of them are saying, "no thanks" and
walking
away. Investors are worried that no deal will occur and that the U.S.
government might step in and start slicing up WM's assets and selling them off.
This will kill equity investors and squash hopes of any premium from a buyout.
We knew WM was going to be a volatile stock and we warned readers that this was
a very high-risk, speculative bet. It's not dead yet but share price decline is
suggesting the company may not be long for this world. We had listed the October
or January
calls as suggested strikes to buy.

The XOP tagged its 10-dma and bounced back above the $50.00 level. Volume was
pretty light on the move. No one really wants to make a big bet while the Wall
Street bailout package is still up in the air. Please note that we're raising
our stop loss to $48.45. We are not suggesting new bullish positions at this
time. The XOP hit our first target on Sept. 19th. We're currently aiming for the
$53.50 mark.

Put Updates

Volatility Index - VIX - cls: 32.82 chg: -2.37 stop: n/a

Hope that lawmakers might approve the $700 billion bail-out plan lent some
strength to stocks today. This pulled the VIX lower although it failed to close
under its 10-dma. We don't see any changes from our previous comments. You could
wait for another failed rally or blow-off top type of move around the 40 region
as an entry point. Or you could wait for a breakdown under the 10-dma as an
entry point. We're setting our first target at 25.50. Our second target is
21.00.

Strangle Updates

None

Dropped Calls

Tidewater Inc. - TDW - cls: 58.26 chg: -0.41 stop: 57.90

Crude oil bounced today and the oil service stocks responded in a similar
fashion. Unfortunately, TDW under performed its peers and the broader market.
The stock broke down under its 200-dma, its 50-dma and the $58.00 level to hit
our stop loss at $57.90.